July is Michigan Craft Brewer’s Month. I recognized this holiday, and our country’s independence, by visiting two of the state’s newest brewers, both located in Petoskey. This lead to yet another discussion about craft beer in cans.
Unless you’re exclusive a wine drinker and oblivious to the world around you, you’ve surely noticed the seemingly overnight proliferation of craft beers being sold in cans. It’s a ‘thang. Some think it’s a gimmick. A few idiots even think it’s a mistake. Let me set the record straight… no matter your personal bias towards cans, it is most definitely a thing…it’s a stunning economic milestone.
ECON 101 It BLOWS MY MIND how many people don’t get it, poor fools who are willing to go into debt for a liberal arts degree. We live in a world based on commerce. While admirable, an Arts degree will rarely pay the rent let alone a mortgage. With those poor readers in mind, let me explain the basic free-market imperatives that perfectly illustrate 1) why the first thirty years of craft brewing in Michigan were almost exclusively in glass and 2) why the next thirty years will most definitely be dominated by cans.
- AUTHOR'S NOTE: Life is too short to endure ugly. I LOVE and $upport the arts. I belive Artist is an admirable profession. If I've offended anyone with a Liberal Arts dregree I apologize - and ask that you suck it.
IN THE BEGINGING While making beer is a hobby, selling it is a business. When craft brewers began entering the business world they were confronted with the same realities any start-up endures…. managing cash-flow, leveraging debt and creating demand (marketing). When faced with these constraints all businesses are forced to make choices. Perhaps they forego better visibility or foot traffic in place of a lower-rent storefront. Perhaps they make their own signs to avoid printing fees. For craft brewers, they made the economic decision to pack in glass versus cans.
QUALITY MY ASS First let me dispel a myth. There are many folks who argue glass is a superior vessel for craft beer. To that I say, bullshit. Here are the most frequent arguments for and against…
1) Taste: It’s said that cans add a metallic flavor to their contents. What about soup? For decades there has been technology that coats cans and eliminates any flavor migration. It is very practical to produce beer in cans without a tin flavor issue.
2) The Lid: Many can’t let go of the metallic issue. They argue that can lining doesn’t resolve the flavor issue that comes from the sipping through a tin lid. To those folks I’d ask how many craft beers they drink from the bottle. Craft beer is usually unfiltered. That means it’s prone to sediment in the bottle. I, like most, pour my beers into a glass. Objection neutralized.
3) Light & Air Transmission: Here’s one clearly in favor of canning. Light and air are both detrimental to maintaining quality. That’s why all craft beer is in dark glass. Cans are far superior in both light and air transmission.
4) Environmentalism: I’ve yet to find a company or academic who can produce quantifiable data for carbon-foot-printing. It’s all too theoretical. That leaves the practical science of finance to determine environmentalism. Again, cans are the clear winner. They are lighter, less costly as a raw material, use-less space thereby reducing shelf-space and freight, and according to every article found on the subject, recycled at a higher rate than glass. Cans win again.
So why did all craft beer start in glass?
It’s All about the Benjamin$ Now we’re onto something…and quite frankly – the only thing that matters. Imagine that you are an enterprising brewer. You’ve decided to make the leap into commercial enterprise. You’ve depleted your savings, hit-up every friend and family member who’ll take your call and applied for several SBA loans. You’ve quickly figured out it takes money to make money.
Now think about that pesky little business plan. Yes, all your friends think you make righteous brew, but will anyone buy it? How much brew do you have to sell to break even? How much do you have to sell to actually turn a profit? Hold that thought…
Most brewers sell on-premise. It’s an important part of the craft beer culture. Having said that, the real money comes from retail – selling your beer for consumption off-premise. That’s where the bottle vs. can argument takes traction.
My research tells me that a used bottling line can be had for as little as $20K. Blank bottles are readily available. They’re also easy to manually label and pack. Can-lines, on the other hand, are much more mechanized. They tend to have higher run-rates and require pre-printed packing stock (cans). The investment for a canning line can easily hit $200K. Think about that…$20K for a bottling line vs. $200K for cans. Unless you’re an independently wealthy trustafarian there’s no debate. That, my friends, is why all craft beer started in bottles.
So what’s with the recent “Can-demic?”
PHASE 2: MARKET PENETRATION Here’s some good news – Craft brewers have entered a new stage in the adoption curve. They’ve grown from a niche cottage industry to bonefied mass-market contenders. Pretty cool, right? Maybe. There’s a rub…when you play in the big leagues the rules change and craft brewers re being forced to adapt. In the mass-market long-necks and growlers don’t carry the weight. Welcome the can.
According to Forbes 53% of all beer is sold in cans. When you look solely at retail, eliminating kegs and beer sold in draft, the percentage of beer sold in cans in closer to 75%. That’s a pretty big market to ignore. Any brewery trying to make the financial leap from local-craft to regional or national player MUST offer cans. Without cans you won’t get served on pool decks, in parks, at sporting events or festivals – and without those you won’t get shelf-space – which means you won’t get distribution. Follow the money trail. Cans are a necessity for scale.
Want more proof? Look at Brewery Vivant and Petoskey Brewing. Here are two well-funded and networked up-start brewers. Arguably one has much better beer than the other. Regardless, both began their business with a can line. Why? The craft beer market is maturing. Simply offering good beer isn’t enough anymore. The market is saturated. In order to differentiate you need to penetrate new channels, IE Cans.
WIZ-BANG The “Sam Can.” OK – so let’s agree that cans are important. That doesn’t mean there’s not still some marketing trickery going on. You wanna talk gimmicks? Here’s a gimmick. After years of fighting the quality campaign, Sam Adams is giving in to the economic pressure for cans. You have to understand – this is a big deal. For years, Jim Koch and the Boston Beer Company has been playing quality card against “Macro Brews.” Bottles and glassware have been an integral part oft their shtick.
Still, even Sam can’t ignore the opportunity cost of cans. So in an effort to not look like total hypocrites they’ve developed a new can design to coincide with their launch of the Sam Adams sold in cans. Enter the “Sam Can.” This "revolunionary" can has a slightly more generous lip, allowing better flow. (*cough*bulshit *) They’re reporting that over $1MIL has gone into the development of this can. Believe me when I tell you, this is marketing hyperbole at it’s best (or worst). There is no reason, other than stubborn pride, that Sam waited this long to put their beer in cans and refuse to use standard beer cans.
Fighting for Good vs. Evil: THE CAN VAN
In my research for this piece I ran across a pretty cool story. Two righteous MBA chicks from northern California have found an interesting way to both capitalized on the can craze and at the same time, nurture small brewers. They figures out what I’m telling you today…1) selling in cans is a strategic imperative and 2) producing cans is financially prohibitive. Solution: The Can Van.
These two ladies have created a successful business by providing the infrastructure for canning without the capital investment. They’ve put a canning line on wheels. Small brewers can rent their services to pack in cans. They’ve also eliminated the high-cost of pre-printed cans by developing a pack-line that allows small brewers to wrap-label unprinted cans. It’s brilliant. Yay Free market capitalism!
MI CRAFT CANS OK – so there’s my meditative rant about craft beer in cans. Thanks for sticking with me. By now you’re probably asking, “GastroBoy, what are some of the best canned beers in Michigan?” To that I provide these thoughts…
Frankinmuth Brewery – Twisted Helles Lager, 5.5% ABV, 18 IBU, 83 Beer Advocate Score
Before craft beer took over my fridge I had two house favorites, Corona in summer and Guinness in winter. And while I love craft beer, it’s rare to find a good session beer or light lager. Here’s a perfect answer to the “lawn mowing beer.” It goes down like water. They also get props for a very cleverly designed package; the finger holes mimick two eyes within a pair of wayfarers. Charming.
Petoskey Brewing –Mind’s Eye IPA, 6.7 ABV, 74 IBU, not yet rated on Beer Advocate
Everyone’s talking about Horney Monk, their Belgian Dubbel. If you prefer malt to hop go for it. I will line-up behind the IPA all summer long. Neither is as refined as I’d like - and clearly too high on the ABV to truly be considered a summer-time session, still, I can’t help but get excited for a brewery in Petoskey, let alone in cans that I can take on the boat. To be candid, the pint cans (vs. 12 oz) annoy me. By nature, the cans are being consumed outdoors, which means I retain cold-value by having the last 25% remain on ice. And the price-point for 4-16 oz (net 64 oz) cans is similar to 6-12 oz cans-or-bottles (net 72 oz). What gives? I will assume the margin is better and they’re exploiting the novelty of cans.
Brewery Vivant – Farm Hand (Saison / Farmhouse Ale), 5.5% ABV, IBU unknown, 82 on Beer Advocate
I can’t stop gushing over Vivant; the beers, the funeral-home chapel turned tap-room, the cans – I love it all. I have found Farm Hand to be their broadest crowd-pleaser. The lighter ABV and subtle notes make it a perfect summer brew. And they’ve developing a strong distribution footprint. Bravo.
Arcadia Bewing Co. – Whtsun, 6.2 ABV, 17 IBU, 80 on Beer Advocate
Twice this year I’ve been asked to weigh-in on my opinion of Oberon vs. Whitson. Truth be told – I can’t be objective. I have a tremendously sentimental attachment to Oberon. That said, I have fallen in love with Whitsun. And until Larry get’s that can line running I can continue to avoid taking a stand and buy Oberon for the house and Whitsun for the cooler.
Wish List: The worst beer I ever drink is at tailgates. Historically that’s where I get my annual fix for Miller Lite or Labatt Blue in cans. How cool would it be if we all drank Wolverine Brewing at the next tailgate? And forget Premium Lager. Yes, it’s fine. However, I want Gulo Gulo!! What say you Liz (@a2beerwench)? Let’s go in on a can-van. We can rent it out when you’re not using it.
Post Scrpit: EXTRA CREDIT In honor of MI Craft Brewers month I did one more thing…I initiate my very first batch of home brew. As I type, a gallon of malted barley and cascade hops are fermenting in my dining room. Here’s where you come in…I’m looking to name this “GastroBrew.” By recipe it is an IPA. I need help. Are you creative? Finally – a use for that liberal arts degree. Click comment and help me name my beer.